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By
Jan
E. Hensel
There are many situations in which employers offer
employees compensation—usually in the form of severance
pay—in exchange for a release of all claims that the
employee may have against the employer. However, recent
court decisions highlight that employers must exercise
extreme caution when obtaining and enforcing such
releases.
Releases Of Age
Discrimination Claims
In order for a release to be valid, it must be “knowing
and voluntary.” For releases of age discrimination
claims arising under the Age Discrimination in
Employment Act (“ADEA”), the Older Workers’ Benefit
Protection Act (“OWBPA”) sets forth explicit language
that must be included in the release, including advice
to consult with an attorney, 21 days to consider the
agreement and a seven-day recission period. The language
of the release must exactly comply with the technical
requirements of the OWBPA to be enforceable; substantial
compliance is not sufficient. An employee who signs an
invalid release is not required to tender back any
severance payments in order to pursue an ADEA claim; the
employee can keep the money and file a lawsuit against
the employer.
Releases of Equal Employment
Opportunity Commission Charges
The federal employment discrimination statutes (Title
VII, ADEA, the Americans with Disabilities Act, and the
Equal Pay Act) all contain provisions that prohibit
retaliation against employees for enforcing the
protections of these statutes. The Equal Employment
Opportunity Commission (“EEOC”), the federal agency
charged with enforcement responsibility of these
statutes, has promulgated regulations that prohibit the
waiver of an employee’s right to file a charge of
discrimination with the EEOC; courts routinely find such
waivers to be unenforceable as against public policy.
The EEOC goes even further, however, taking the position
that clauses requiring employees to waive their right to
file a charge of discrimination with the EEOC have a
“chilling effect” on employees’ pursuit of such rights
and are therefore “facially retaliatory.”
At least one federal circuit court—the Fourth
Circuit--has adopted the EEOC’s position and held that
requiring an employee to sign a waiver of the right to
file a charge of discrimination is “facially
retaliatory” and thus actionable, although waiving only
the right to obtain monetary damages is not. In a recent
decision, the Sixth Circuit Court of Appeals disagreed
with the Fourth Circuit holding that the mere act of
requiring an employee to execute a release in order to
be eligible to receive severance benefits does not
constitute actionable retaliation. In its decision, the
Court indicated, though it did not decide the issue that
actions taken to enforce such a provision, such as
cutting off severance payments, may be retaliatory.
Conclusion
Great care must be taken when obtaining waivers of
employee claims as part of a negotiated severance
package. Unless the release is carefully and accurately
worded, it may not be worth the paper on which it is
written. Even worse, under certain circumstances, the
employee can keep the severance pay and still file an
action against his employer. In the worst case scenario,
the employee can keep the severance payments and file an
action for damages, claiming that the employer
retaliated against him by requiring him to sign the
release. To avoid such nightmare scenarios, it is
imperative to enlist the assistance of legal counsel
when obtaining releases of claims from employees.
_______________________________
Jan
Hensel
is a Shareholder and Chair of the Employment & Workers'
Compensation Practice Group. She can be reached at
jhensel@bdblaw.com
or
614.227.4267.
By
I. Jeffrey Pheterson
In United States. district courts in Florida and
throughout the country, the filing of cases under the
Fair Labor Standards Act (FLSA) has proliferated. The
majority of these cases are filed by a small group of
attorneys who specialize in overtime and minimum wage
cases. Virtually all of these cases are resolved by
settlement. The cost of litigation is dear when compared
with the often modest damage claims (even if one gives
credence to the Plaintiff’s assumptions, regardless of
their accuracy.) It is the rare FLSA case that actually
gets to trial.
To deal with this significant volume of cases, and thus
of settlements, some judges developed standard
procedures for handling these settlements. Judge James
C. Paine wrote an extensive and instructive 13-page
standard Order.
The court “will not simply rubber stamp” an FLSA
settlement. It must review the details of the settlement
terms to assure it is a fair and reasonable resolution
of a bona fide dispute.
A major struggle in these cases involves plaintiff's’
attorneys' fees. In FLSA cases, the tail may wag the
dog, as it is common that the amounts sought for
plaintiffs’ counsel fees far exceed the worst-case
scenario for damages.
To determine the reasonable fee, one looks at the number
of hours reasonably expended on the litigation
multiplied by a reasonable hourly rate. Detailed
original records are required by the Standard Order to
support claims for attorney time. Itemized time records
are mandatory. The judge requires copies of “the entire
daily time-sheet for each day that attorney worked on
this case.” Details concerning other clients are
redacted. Thus, whole days of time will be reviewed.
This brings to mind the joke about the young attorney
who unexpectedly found himself at St. Peter’s Gate, and
was told he was long overdue, based on his age as
reflected in his time records. Not before this judge.
Judge Paine notes “the firms handling this type of case
tend to be boutique firms specializing in the handling
of these cases.” Thus, the Court expects an economical
use of research and standardized documents.
Finally, “the parties should note that this order has
been prompted in part by this court's observation that
in many FLSA cases, the sum awarded to the plaintiffs is
very small, often under $1,000, and the attorneys' fee
is very large, even as high as $30,000.” Thus, the
equitable concern for some proportionality cries out for
consideration. Judge Paine notes there is no
“hard-and-fast rule” regarding excessive fees in minimal
damage FLSA cases, observing that while “tempting …,
there exists no rule requiring strict proportionality.”
Judge Paine’s standard Order is but one way that federal
judges are seeking to cope with this flood of FLSA
litigation. Another Florida federal judge requires
plaintiffs to file a statement of the specific damages
sought, with detailed calculations, very early in every
FLSA case. This also aids in settlement.
Consequently, the courts are developing ways to ensure
that the Congressional intent is honored, while the
rights of the parties are respected, and these cases are
kept in their proper perspective.
For many clients, FLSA cases will be the only “federal
case” they are ever involved in. The proper response by
parties, through counsel, to these FLSA cases is
essential, in order to resolve these matters in an
expeditious and cost-effective manner.
_______________________________
Jeff Pheterson
is a Shareholder in the Employment & Workers'
Compensation Practice Group. He can be reached at
jpheterson@bdblaw.com
or
561.241.0414.
By
Barbara A. Knapic
Now that the dust has settled
on the elections and the referendum regarding Senate
Bill 7 was not put to a vote, it seems a good time to
recap the provisions included in Senate Bill 7 and when
they became effective.
As a result of the failed referendum challenge, there
are two separate effective dates for various provisions
of the bill, depending upon whether the provision was
being contested or not. For those provisions not
contested, the effective date is June 30, 2006. For
those portions of the bill that were under challenge,
the effective date is October 11, 2006. In some
instances, the specific provision will apply only to
claims where the dates of injury are on or after October
11, 2006.
Of primary interest to employers participating in the
workers’ compensation system are those provisions of
Senate Bill 7 that affect a claimant’s entitlement to
benefits and compensation and the Bureau of Workers’
Compensation’s regulation of employers.
For dates of injury on or after October 11, 2006,
psychiatric conditions that are the result of forced
sexual conduct will be compensable. While the Ohio
Supreme Court recently found in the McCrone case
(successfully argued by
Robert C. Meyer of the BDB Canton
office) that a psychological injury without a
contemporaneous physical injury is not compensable, the
legislature recognized that there might be certain,
specific incidents where an exception should apply.
Sexual conduct is to be defined according to the Ohio
Criminal Statutes.
For years Ohio employers have struggled under a
definition for an “aggravation” that held “any
aggravation, however slight” was sufficient to establish
a new claim. For claims with a date of injury on or
after October 11, 2006, in order to prove an
“aggravation” of a pre-existing condition and have it
added to or as a claim, the claimant must prove that the
condition was “substantially” aggravated and such proof
must be by objective evidence such as X-rays or MRIs.
Once the aggravation subsides and the pre-existing
condition returns to baseline or pre-injury status, the
employer is no longer liable for payment of treatment or
compensation for the condition.
As of October 11, 2006, the loss of an extremity (i.e. a
leg or arm) does not constitute the loss of two body
parts (i.e. a leg/foot or arm/hand) for purposes of
determining eligibility for statutory permanent total
disability. In addition, as to permanent total
disability determinations, the new legislation specifies
that PTD shall NOT be granted when the claimant is
unable to engage in sustained remunerative employment
if: his impairments are the not the result of the
industrial injury; his inability to perform sustained
remunerative employment is due to his age; the employee
has voluntarily resigned or otherwise voluntarily
abandoned the work place and/or the employee has failed
or refused to participate in vocational rehabilitation
efforts.
When calculating the average weekly wage for the payment
of PTD benefits, the BWC is now required to base its
calculation on the date of injury or, in the case of
occupational disease, on the date of disability. The BWC
cannot recalculate the AWW solely on the basis that the
claimant continued on in the work force and his wages
increased after the injury or first date of disability.
Also effective as of October 11, 2006, in all claims for
injured workers with traumatic brain injuries, the
claimants will be permitted to receive permanent total
disability benefits while working in a sheltered
workshop environment as long as they are making no more
than $2,000 per quarter.
A claimant is NOT entitled to receive compensation in a
claim if that claimant is convicted of a crime and
incarcerated in a county, state or federal facility.
Previously, the law only addressed incarcerations in a
state or federal prison.
With respect to matters appealed into Common Pleas
Court, as of October 11, 2006 attorneys’ fees for
claimant’s counsel, when the claimant is found entitled
to participate in the workers’ compensation fund, is
raised from $2,500 to $4,200. In addition, a claimant
may not dismiss an employer’s appeal into common pleas
court without first obtaining the employer’s consent. It
appears that this matter is still open for
interpretation as one court in Franklin County has held
that this provision only applies to cases filed after
October 11, 2006.
With respect to group-rated, state-funded employers,
Senate Bill 7 requires that the BWC establish a program
that mitigates the impact of significant claims and
supports the existence of the One Claim Program. It also
increases the threshold of the BWC’s $1,000 program to
$5,000. However, employers should be mindful that when
opting to take advantage of the $5,000 program, the
employer cannot use the MCO to manage the claims nor can
it take advantage of the BWC negotiated fee schedules
and prescription rates.
The settlement process, as to state-funded employers,
has also changed under Senate Bill 7. As of October 11,
2006, the BWC can settle a claim in the absence of the
employer’s agreement when 1) the employer is no longer
doing business in Ohio; 2) the settlement application is
filed after October 11, 2006 and the claim is outside
the employer’s experience and the claimant is no longer
employed with that employer and if the employer is doing
business in Ohio, the BWC shall send written notice to
the employer and the employer fails to reject the
settlement within 30 days and; 3) the settlement
application is made after October 11, 2006 and the
employer’s coverage has lapsed, is canceled or the
employer is in noncompliance status. Again, if the
employer is still doing business in Ohio, the BWC must
send written notice to the employer and, if the employer
does not respond within 30 days, the settlement need not
contain the employer’s signature.
Senate Bill 7 provides for various new, more stringent
prohibitions against any fraudulent actions by Managed
Care Organizations and health care providers. It also
requires that the BWC adopt rules to assess penalties
against self-insured employers for failing to timely pay
assessments. Senate Bill 7 also includes a provision for
increased penalties for overdue premium payments. The
BWC special investigations unit (SVU) was designated as
a criminal justice agency. This designation allows the
BWC SVU to access various criminal databases to further
their investigations.
During the drafting and the passing of Senate Bill 7
there were discussions regarding the release of
claimants’ names and addresses under the Ohio Public
Records laws. Senate Bill 7 provides that injured
workers’ telephone numbers and addresses are no longer
public record, with the only exception being the release
of information to journalists.
With the election of a new governor and the resignation
of William Mabe as the Administrator/CEO of the BWC, the
next transition in the Ohio workers’ compensation arena
is the appointment of a new Administrator. In addition,
Governor Strickland has appointed Employee Member,
Patrick Gannon, as the Chairman of the Ohio Industrial
Commission.
If you have any questions regarding the contents of this
article, please contact one of our BDB workers’
compensation attorneys.
_______________________________
Barb Knapic
is a Partner in the Employment & Workers' Compensation
Practice Group. She can be contacted at
bknapic@bdblaw.com or
330.491.5237.
Congress Deliberates the
Employee Free Choice Act
Earlier this month, Representative George Miller of
California introduced H.R. 800 in the United States
House of Representatives. The purpose of the bill,
nicknamed the “Employee Free Choice Act,” is to amend
the National Labor Relations Act (“NLRA”) to make the
process of organizing unions more efficient. The
major provisions of the bill include:
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A requirement that the
NLRB certify a bargaining representative if majority
of the employees in the bargaining unit sign a
petition indicating their desire for representation,
without the need for secret ballot vote by all
employees in the bargaining unit.
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A requirement that
employers and unions meet and negotiate the initial
bargaining agreement promptly following a
certification. If the parties do not reach an
agreement after 90 days, the parties may engage the
Federal Mediation and Conciliation Service to help
resolve any impasse and get the first collective
bargaining agreement finalized and executed.
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An increased enforcement
emphasis on unfair labor practices that arise from
organizing activities or during the period between
certification and entering into the first collective
bargaining agreement. The bill contemplates a
civil penalty of $20,000 per occurrence for any
employer who willfully or repeatedly engages in
unfair labor practices of this nature.
BDB will monitor the
status of this important bill and keep you informed on
its status.
____________________________________
Revisions to Family and Medical
Leave Act Regulations May Soon Be Coming
The Department of Labor recently issued a request for
comments from the employer community regarding the
Family and Medical Leave Act (“FMLA”) and its
implementing regulations. Some of the specific issues
the Department sought input on include: the strict
penalties that courts have imposed on employers for not
complying with FMLA notice requirements, the definition
of what constitutes a “serious medical condition,” and
the challenges that employers face in trying to navigate
the sometimes conflicting requirements of HIPAA, the
Americans with Disabilities Act (“ADA”), and the FMLA.
This review of the FMLA implementing regulations may
signal that new guidelines favorable to employers are
forthcoming. It is anticipated that DOL will use this
opportunity to correct some of the major frustrations
with FMLA implementation, such as abusive use of
intermittent leave and other challenges.
BDB will monitor the status of this regulatory review
and keep you informed on its status.
____________________________________
Ohio Legislature Passes Bill
Clarifying New Minimum Wage
On January 2, 2007,
former Governor Taft signed House Bill 690 into law.
This bill provided clarification and guidance for
employers on implementing the minimum wage amendment
that Ohio voters approved in November.
Some of the major
provisions of H.B. 690 include:
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An exemption from the
minimum wage for employers with gross annual sales
below $150,000.
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A definition of employee
that excludes certain workers from the minimum wage
requirements. Those workers include federal
employees; in-home caregivers (babysitters);
newspaper deliverers; outside sales and employees
who qualify for the professional, executive, or
administrative exemptions under the FLSA; volunteers
in hospitals or health care institutions; police,
fire protection officers, and students employed by
political subdivisions on part time or seasonal
basis; workers at seasonal camps or recreation areas
run by non-profit organizations; and workers
employed directly by the Ohio Legislature.
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An explanation of the
record keeping requirements. Under H.B. 690,
employers must maintain Payroll Records for three
years from when the record is made. Payroll
Records are defined as an employee’s name, address,
occupation, pay rate, hours worked each day worked
(total hours only and does not include start and end
times or clock-in/clock-out times), each amount paid
(total gross wages). However, employers are
not
required to maintain records of hours worked for
each day worked for those employees who are exempt
salaried employees under the FLSA. The bill
also states that employers may maintain Payroll
Records in any format, paper or electronic, so long
as the format can be accessed and provided to an
employee upon record.
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A clarification of the
Payroll Records disclosure requirements. H.B.
690 states that employees may request only their own
payroll information. It further limits the
representatives that may request Payroll Records on
an employee’s behalf to the employee’s attorney,
legal guardian, or certified collective bargaining
representative. Employers may require requests
for payroll information to be in writing and
notarized. If a valid request is received,
employers must provide the requested information to
the employee within 30 days. However,
employers have immunity from any civil liability for
injury, death, or loss that results from their
release of Payroll Records in accord with a valid
request.
Many of the original
proponents of the minimum wage amendment oppose the
provisions of this bill and are challenging its
constitutionality. It is anticipated that some or
all of the legislation may face judicial review in the
near future. Therefore, employers should comply in
good faith with the law as it exists today, but stay
alert for more developments. BDB will keep you
informed on any important changes.
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Ms. Casanova has been
with the Firm since 2005, practicing in the Real
Estate & Construction Practice Group.
She made
the transition to the Employment & Workers'
Compensation Practice Group in January 2007.
Ms. Casanova represents employers before the
Industrial Commission and courts of Ohio. She
also represents clients in court, arbitration,
mediation and administrative proceedings on
construction related matters. Ms. Casanova
previously worked as in-house counsel for a
commercial construction company and served as a law
clerk in two Columbus, Ohio law offices. She also
served as a Judicial Law Clerk in the Tenth District
Court of Appeals in Franklin County, Ohio.
Ms. Still’s practice is limited to defending
employers in cases involving wage and hour claims,
discrimination under Title VII, the ADA, ADEA,
Section 1981. FCRA, and other employment law
statutes. Ms. Still has been Board Certified
in Labor & Employment Law by the Florida Bar since
2001, the first year certification became available,
and is also certified by the Supreme Court of
Florida as a civil circuit mediator.
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Save
the Date for these Upcoming Presentations:
March 14
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Tod T. Morrow
(Canton)
will be speaking at the CAK Safety Council CEO meeting.
His topic will be "How to Control Workers'
Compensation Costs."
March 15 -
Tod T. Morrow
(Canton)
will also be presenting at the Tuscarawas County Safety
Council meeting
on "Avoiding Liability for Workplace Accidents."
March 21 -
Tod T. Morrow
(Canton)
will be speaking at the Bureau of Workers' Compensation
All-Ohio Safety Congress, where his topic will be
"Navigating Your Way Through the Disability Minefield."
March 28
-
Kristina M. Harless
(Canton)
will be speaking at SIGO's Annual Education Day
regarding, "Retaliatory Discharges: Coolidge
vs. Riverdale Local."
April 4 -
Jan
E. Hensel
(Columbus)
will be a presenter at the Council on Education in
Management program entitled, Recent Developments in
Employment Law. This two-day seminar will be held in
Columbus, Ohio and will be
geared toward HR professionals. Ms.
Hensel's topic is "The Firing Block: Strategies to
Prevent Lawsuits Arising From Termination."
May 7
-
Mary E. Reynolds
(Canton)
will be giving a presentation to the Industrial
Commission Statewide Hearing Officer Training Meeting at
Maumee Bay. Her topic is "New Developments in
Workers' Compensation."
May 16 -
Tod T. Morrow
(Canton)
will speak to the Summit County Safety Council on
"Workers' Compensation Reform."
Out and About - Recent Presentations:
Christine M. Faranda and
Douglas J. Paul
(Cleveland),
Kristina M. Harless and
Mary E. Reynolds
(Canton),
and Janice E. Casanova
(Columbus)
presented a mock trial presentation highlighting
FMLA, ADA, and workers' compensation retaliation
issues to the Disability Management Employers
Coalition at Maumee Bay State Park Conference
Center.
Barbara A. Knapic
(Canton)
made a presentation at a National Business
Institute Advanced Workers' Compensation
Seminar. Ms. Knapic also spoke at a recent
Hancock County Safety Council meeting.
Robert C. Meyer
(Canton)
spoke at a National Business
Institute Seminar on "Workers' Compensation Basics."
Tod T. Morrow
(Canton)
presented an Employment Law Update to the Northeast Ohio
CPA Forum at the end of last year. Recently, he
delivered a similar presentation to the Tuscarawas
County Chapter of the Society for Human Resources.
Susan C. Rodgers
(Akron)
spoke to the Akron Society for Human Resource Management.
Her topic was "Minimum Wage, Smoking Ban and Trends in
Employment Litigation." Ms. Rodgers also presented
with
Amanda L. Walls
(Canton)
at the AkronWorks Career Fair regarding "The Top Ten
Things You Can Do in 2007 to Avoid Employment Law
Liability."
Amy L. Scheurman
(Cleveland)
gave a presentation on
"Ohio's New Smoking Ban Legislation"
to the Commerce Club of Akron.
If you are interested in obtaining
information on upcoming seminars or would be interested
in having speakers from Buckingham, Doolittle &
Burroughs, LLP make a presentation to your organization,
please contact: Lorna Henderson, Client Relations
Administrator
lhenderson@bdblaw.com or 800.686.2825 ext.
86473. |
